Cameron’s five-year legacy: has he finished what Thatcher started?

Cameron’s five-year legacy: has he finished what Thatcher started?

Margaret Thatcher wanted to privatise Britain; David Cameron’s ambition went further. Assessing his legacy for their new book, Polly Toynbee and David Walker document the Tory leader’s assault on the state

David Cameron with Margaret Thatcher on the steps of Number 10 Downing Street in 2010.
Photograph: Oli Scarff/Getty Images

On 12 May 2010, in the sunlit rose garden of No 10, David Cameron and Nick Clegg announced the creation of Britain’s new coalition government. In a flawlessly stage-managed performance, Cameron proclaimed the birth of a “new politics”. His coalition government would, he said, be underpinned by the principles of “freedom, fairness and responsibility”.

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This cosy launch, it turned out, was a bluff. Under Cameron’s leadership the country has become harder and meaner, more divided by class and region. Readers of thinktank reports and those acute enough to hear the behind-the-hand remarks, knew what to expect. But Cameron is dextrous, emotionally intelligent, like Tony Blair. In the runup to the 2010 election, he sprinkled speeches and photo-opportunities with new flavourings – green trees, social enterprise, the “big society”, free schools, hug-a-hoodie, vote-blue-go-green, the-NHS-is-safe-with-me. Such posturing irritated Conservative backbenchers, some of whom disliked his metrosexual manner and support for gay marriage. But Cameron’s style was no handicap: that easy, upper-class air dispelled any suggestion he was driven by zealotry.

The coalition agreement that was hashed out in the days before the rose garden show was a strange magna carta. It promised a national tree-planting campaign, “honesty in food labelling” and a pledge to “encourage live music”. These turned out to be distractions – only the thundering final clause mattered: “Deficit reduction takes precedence over any of the other measures in this agreement.” From then on, the Liberal Democrats were a sideshow, passively approving the most brutish cuts and offering negligible contributions of their own.

Cameron seized the 2010 “crisis” to realise his ideological ends. By exaggerating the parlous state of national finances, he was able to pursue his longstanding ambition to diminish the public realm. Margaret Thatcher privatised state-run industries; Cameron’s ambition was no less than to abolish the postwar welfare state itself. The Office of Budget Responsibility recently announced Cameron’s victory – by 2018, it forecast, we would have a state the size it was in the 1930s.

Nick Clegg and David Cameron announce the coalition government’s policy programme at a press conference in the rose garden of No 10 Downing Street. Photograph: Charlie Bibby

This was a coup, though Cameron, unlike Thatcher, would never triumphantly produce from his pocket a crumpled copy of a pamphlet by the rightwing economist Friedrich Hayek; the swivel-eyed stuff was left to backroom guru Oliver Letwin, former special adviser to Keith Joseph, the man who said Conservatives should no longer conserve but instead demolish all that stopped the flowering of individualism. Cameron was guided by the groupthink of his generation of young Tories, inspired by the Thatcher posters on their college walls. From Tory central office, where he worked for two years before his heroine’s fall in 1990, he breathed in the accepted wisdom that the state is an impediment, the market solves all ills and individualism trumps collective endeavour. “Frankly, I don’t like any taxes,” Cameron told the Federation of Small Business a year ago.

Despite failing to win the election, the Tories proceeded to savage welfare, destabilise the NHS, decouple schools from collective control and replace public service provision with markets and contracts. These developments were foreseeable, but even Cameron’s fiercest critics might not have expected that during its five years in office, the government would go on to jeopardise the unity of the UK itself and threaten Britain’s standing in the world.

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Juvenile irresponsibility

In his book Capital, Thomas Piketty observed that in advanced economies wealth has become so concentrated among the few that most people are virtually unaware of its existence. Great wealth is secret, and its hold on power even more so. Who knows what goes on over country suppers in the Cotswolds, where the prime minister’s neighbours include Rebekah Wade and Rupert Murdoch’s daughter Elisabeth, with Mark Carney’s sister-in-law and lobbying magnate Lord Chadlington next door? Yet people have inklings. Cameron provokes nothing like the visceral response that Thatcher did, but he has not erased people’s resentment of privilege. Today’s opinion polls reflect a scratchy sense of unfairness. George Osborne’s mantra, first chanted at the 2012 party conference, “all in it together” raises a hollow laugh.

The story of the Cameron era had unexpected twists. Members of the Bullingdon Club are bred to rule, so it was surprising they turned out to be so inept in the basic arts of government. Time and time again they stumbled into self-made disarray, from the attempt to sell publicly-owned woodland to the proposal, later scrapped, to increase the speed limit to 80mph.

Cameron shares more than Eton with Boris Johnson; they have both exhibited a kind of juvenile irresponsibility in power. Cameron appointed as environment secretary Owen Patterson, a climate-change sceptic, the man who blamed the badgers for “moving the goal posts” when too few of them submitted to being shot by Tory farmers. Despite the desperate need for new homes, his first housing minister, Grant Shapps, tried to block plans for a housing estate on the airfield where he kept his Piper Saratoga plane. Cameron has been equally frivolous about the EU, casually offering an in-out referendum, although he knows his own conditions for “reform” could never be met.

Perhaps it’s naive to call Cameron’s set “irresponsible” with power; they acted with premeditated intent. The administrative disarray the Tories caused in one department after another had a purpose. “In our vocabulary chaotic is a good thing”, Nick Boles, who went on to become planning minister, told the Institute for Government in 2010. What we are doing to the public sector is “creative destruction”, said Cabinet Office minister Francis Maude. Too large a public sector “crowded out” enterprise, said Osborne. Over the four years from May 2010, public sector employment fell from 21.6% of the UK workforce to 17.6% – to less than one job in every five, a lower figure than for the past four decades.

Good fortune aided the Tories. In 2008 GDP contracted; by May 2010 growth had returned, but Osborne’s passion for deficit reduction held back recovery. The argument in 2010 was not about the principle of getting public finances in order: it was about the timetable and at whose expense. A cabal of bankers, economic commentators and corporate influencers demanded that net public debt as a proportion of GDP be lowered to 30%, the lowest ratio for 300 years. The figure was plucked out of US neoliberal texts. Empirical evidence does not suggest that there is a set point at which national debt has a detrimental impact on growth; economies with higher average debt-to-GDP ratios have not lost out on long-term growth.

However baseless Cameron’s economic assumptions, nothing seemed to dent the assertiveness of the deficit hawks. Austerity, they argued, was unavoidable. Unsurprisingly, the poor suffered the most. In opposition, Cameron had said inequality mattered and there was no trickle down to the poor from the rich. In office, the Institute for Fiscal Studies confirms that money has been sucked upwards out of the pockets of the poor to cushion middle and upper-middle earners.

Child poverty has started to rise, ending the downward trend established before 2010. This was inevitable once Osborne decreed that four-fifths of deficit reduction would come from spending and welfare cuts but only one fifth from tax increases. The government, like its predecessor, turned a blind eye to billions owed in tax. Unpaid debts for tax and fines in March 2013 were £22bn. The Treasury estimates that the “tax gap” – the difference between what companies and individuals pay in tax and what they actually owe – is £35bn per year. The National Audit Office (NAO) adds in another £50bn for criminal and fraudulent transactions – a total loss to the exchequer of nearly £100bn a year. What was done about it? Revenue and customs staff were cut.

Farewell welfare

In his bid to rip apart the social security safety net that has been in place since 1945, Cameron found the ideal lieutenant in Iain Duncan Smith. Administratively incompetent, vainly overambitious, barely comprehending his own department’s numbers, Duncan Smith was kept in place as secretary of state for work and pensions because he could say without blenching that the poor were skivers and scroungers who were overbreeding.

Remedies came in the form of the intrusive medical tests, the Work Programme, abolition of the emergency social fund and frozen benefits. We met a junior jobcentre manager, who wished to remain anonymous, in a railway hotel in a Midlands town. “Sanctions are applied for anything at all, just to hit the targets.” Officially the government denied having targets to reduce claimant numbers. “Many don’t know what’s happened until their benefit suddenly stops. Many can hardly read. It’s very easy to hand someone two sheets of A4 and get them to agree to 50 ‘steps’ towards work but they don’t know what a step is, so they’re sanctioned; their claim is shut down and they disappear from the figures.”

In an interview with the Sunday Times in 2012, Duncan Smith said he was warning benefit claimants that: “This is not an easy life any more, chum. I think you’re a slacker.” His comments conjured up a huge pool of lifelong idlers, but in 2012, of the 1.5 million people claiming jobseeker’s allowance, barely 0.3% had been claiming for five years or more.

Another of Duncan Smith’s major reforms failed on its own terms. The bedroom tax was supposed to encourage social sector tenants who had spare rooms to move into smaller properties by removing the “spare room subsidy”. It sounded reasonable in theory, but accounts of resulting hardship soon tumbled out – the family charged for a spare room after a child died, the mother charged when two army sons were sent to Afghanistan. And, thanks to Britain’s housing crisis, there were few smaller properties to move to. Of the 522,000 people penalised for having a spare bedroom, only 4.5% moved out in the first year. Two-thirds of those affected were disabled, 220,000 had children, all of them low-earners hard hit by an average extra £720 to pay per year. The reform was instantly unpopular and saved no money, as evicted people paid higher private rents, which ended up costing taxpayers more in housing benefits.

Anti-cuts protesters dressed as David Cameron and Margaret Thatcher at the TUC march in London, in 2011. Photograph: Peter Macdiarmid/Getty Images

It’s just possible Duncan Smith never understood what he was doing. Never underestimate Tory ministers’ ignorance of welfare and the lives of poorer people. In 2013, Lord Freud, the employment minister, sniffed at “an almost infinite demand for a free good”, apparently unaware that use of food banks is carefully rationed by vouchers from councils and his own jobcentres. Duncan Smith sneered that the Christian-inspired Trussell Trust was politically motivated, as if its food banks handed out tins of baked beans to shame the government.

Liberal Democrats chose not to understand either. Nick Clegg voted for the hugely symbolic cut in the top of rate of income tax from 50 to 45% – a gift to the rich – in exchange for cutting the personal allowance. No one earning under £10,000 would pay income tax, which sounded good for the low-paid. But the cost was high: the £10.7bn in lost revenue could have eased both the deficit and public services. Worse, for low earners, most of the income tax gain would be clawed back in tax credit deductions under Duncan Smith’s universal credit.

But, according to the rightwing narrative, social security was “spiralling out of control”. It’s true that the budget for the Department of Work and Pensions (DWP) constitutes 23% of public spending. But half of that budget goes to pensioners, a group the Tories protected for electoral purposes. Only £1 out of every £33 spent on benefits goes to the unemployed. The government’s own policies sent DWP costs soaring. More “hardworking families” qualified for tax credits because with jobs increasingly low-paid and part-time, they needed the state top-up to survive. Meanwhile the number of people in work who also draw housing benefit is set to double between 2010 and 2018, as rents rise. More than £1 in every £7 from the social security bill now goes to private landlords.

Dismantling the NHS

Nowhere was the dogma and disarray of Cameron’s style of government more evident than in his reorganisation of the NHS. Nowhere was pre-election subterfuge more apparent: ex-Tory minister Michael Portillo later said simply:“They did not believe they could win if they told you what they were going to do.” They pledged not to cut the NHS cash budget, but ignored inflation, an increase in births, rising numbers of over-80s and how cuts in council social care sent more of them to hospital.

The disaster of the 2012 Health and Social Care Act – presided over by the then health secretary Andrew Lansley – stemmed directly from unpublicised pre-election commitments to break the NHS up and introduce market competition, as a step towards realising the Thatcher-era dream of an insurance-based system where healthcare would be provided by profit-making companies. Promises had been made to lobbyists and private contractors, some of them Tory donors. During the late 1980s Lansley had employed a young Cameron in Tory central office as he worked on gas and electricity privatisation. Now, just as Thatcher had “liberated” nationalised industries, Lansley was going to slaughter the most sacred cow of Attlee-era social democracy.

Members of the National Health Action party protest against the gradual privatisation of the NHS, in 2013. Photograph: Guy CorbishleyFlickr Vision

Lansley was a fantasist. He promised patients, “no decision about me without me”, but gave patients no say in running his local commissioning apparatus. Besides, how could they choose the NHS if Virgin, Circle or Serco was running a service? “Liberating the NHS”, the title of the 2010 white paper, turned out to give the central healthcare regulator, Monitor, a remit to enforce commercial competition. The chairmanship of Monitor was taken by a former Tory health minister. At the head of the Care Quality Commission arrived another Tory, former MP David Prior. Sir Malcolm Grant, who in 2011 was appointed chair of NHS England, said he didn’t use the NHS himself.

Governments commit sins of omission as well as commission. Under Cameron another five years have passed in which the increasing numbers of older people needing care at home have been neglected, with dementia cases set to double over the next two decades. In this underfunded sector, staff earn little yet care for those with the most complex disabilities and frailties. We talked to the owner of a care home outside Bromsgrove in Worcestershire. Dryly, he noted that you pay £73 a night at the local Premier Inn, around £4 a night less than for his very frail residents who need round the clock care. This can’t last, yet councils are braced for greater cuts to come.

Gove’s puerile contempt

When Michael Gove became education secretary in 2010, he began by renaming his department. It would no longer be the Department for Children, Schools and Families, it would simply be the Department for Education, as if schooling could be separated from family background. In an entirely predictable error (which Clegg also made), Gove talked of social mobility as if it could be injected into poorer children at school, ignoring all the evidence that shows life chances are largely determined by background and household income. To aid education, schools need to pay attention to social care but, under Gove, programmes for nutrition and special needs were abandoned.

The reactionary strain in Gove was unmistakeable. He was largely uninterested in what schools did for the less able. He attacked what he called the “careers lobby”, whose offence seemed to lie in trying to ease young people into the world of work. He insisted that the teacher’s craft is best learned “on the job” so the number of unqualified teachers grew. An end to council planning led to a shortage of primary school places in many areas.

Gove’s dash to create academies and free schools was in tune with the government’s ideology: remove the state and everything would spontaneously arrange itself for the best. But the Department for Education’s own research suggested that left to themselves academies and free schools didn’t necessarily bear out these ideas. Nor were they accountable to anyone – many now operated by mysterious chains of sponsors, which Gove forbade Ofsted from inspecting. Free schools careered along like driverless cars on unmarked roads, and a few duly crashed as their unsupervised management plunged into special measures or closure.

Gove, a former journalist, delighted his ex-colleagues in the Murdoch press and the Daily Mail with his chortling description of school inspectors, civil servants and teachers as “the Blob”. He treated the entire profession with puerile contempt. Eventually, his abrasive style did for him and he, like Lansley, was defenestrated.

Privatised Britain

In 2010 a government with half an eye on the future could have followed Labour’s plan to speed the economic recovery by replacing Britain’s ageing infrastructure. Even the International Monetary Fund’s austerity rules allow capital borrowing against the creation of productive assets. Cameron vacillated. An infrastructure plan took years to appear and its 500 schemes claiming to be worth £500bn were a scratch list of projects under way or far ahead. Ministers talked of mobilising friends in the private sector or pension funds to invest: they didn’t.

The government’s dogmatism didn’t make it coherent. Tory “localism” was trumpeted as a way of slimming the central state and empowering communities. Local government secretary Eric Pickles instructed councils to empty refuse bins weekly while banning them from raising council tax. At the same time he cut their budgets by a third in real terms over five years; the revenue gap facing Tory Surrey as well as Labour Newcastle-upon-Tyne and scores of other authorities is profound. The home secretary, Theresa May, had promised to end centralisation, targets and ring fences for the police, but then sought to centralise the purchase of equipment – even constables’ shirts and shields. On her watch a mighty constitutional change occurred in the 2011 Police Reform and Social Responsibility Act, which upset a 180-year-old precedent by putting the police in England and Wales under the direct supervision of politicians. But the introduction of elected police and crime commissioners failed to spark any interest as only 15% of electors bothered to vote for them in 2012.

In government you need officials. Downing Street said Whitehall was overstocked with overpaid officials and cut them back. But a philosophical problem for the Tories has been that whoever owns the infrastructure, the state still needs to regulate and plan – to ensure that the lights don’t go out, that goods can move around, that climate change is managed. That requires officials with imagination and expertise. Even granting contracts to the private sector requires skill and experience, as the transport secretary found to his cost when he left under-strappers to negotiate the lucrative contract for the West Coast train line. They were reduced to mincemeat by Richard Branson’s highly-paid barristers.

Tories did believe in parts of the state. Civil servants disappeared from the No 10 policy unit to be replaced by paid Tory advisers. The number of special advisers to ministers went up from 85 to 98, defying a coalition agreement pledge. When Cameron appointed as his political strategist Lynton Crosby, a professional lobbyist for the tobacco industry, no one was surprised plain packaging was swept off the agenda, only now to return, coincidentally just before the general election. Adam Smith, special adviser at the culture and media department, was caught collaborating in NewsCorp’s bid to take over BSkyB; he loyally took the fall for his minister, Jeremy Hunt, who was on the verge of gifting all to Murdoch before the Guardian’s hacking exposure.

Conservative governments have always sought to protect the wealthy, and over the past five years the influence of the rich has if anything increased. In May 2013, the Tory party took over the Hurlingham Club in Fulham and, among other trophies, auctioned off the chance to play tennis against Cameron and Boris Johnson. The guest list, published in the Guardian, displayed the extent to which Westminster has become government by the rich, for the rich. And not just “our” rich but the global super-rich, including Russian and Middle Eastern oligarchs. In parallel, Tory eagerness to avoid state investment has led them to invite the Chinese to take over a significant proportion of the electricity supply, along with the sewers under London streets. So “national security” is compromised and an anti‑state Tory government transfers vital energy and transport infrastructure into the effective ownership of foreign states. No wonder former patriotic and working-class Tories transfer their allegiance to Ukip.

Broken Britain

Toryism is now in deep intellectual disarray. What is the party for, beyond cosseting corporate interests, the much‑praised “wealth-creators”? Shrinking the state is a reflex, not a vision. Business goes on demanding public investment – and rightly so. Businesses, like everyone in Britain, depend on the state to maintain the roads, promote the health and education of a useful workforce, manage the police who provide security, and ensure the quality of air they breathe and the water they drink. The desirability of Britain as a place to live, work and invest all depends on the strength of the state.

At a deeper level, what kind of nation do Tories now believe in, at home or abroad? They profess faith in markets – but not in the UK’s biggest market, the European Union. If by design or bungling, they were to succeed in what so many of them ardently desire and secure UK withdrawal, that would precipitate Scotland’s departure, dismembering the UK and making England very little indeed. As with the related question of migration, Cameron is incoherent, simultaneously for fortress and freedom. His foreign policy has been a kind of armed voyeurism, more worried about Russian money than incursions into Sevastopol. The RAF’s air-sea rescue service has been privatised and the UK has no aircraft to patrol its maritime borders. We “found it difficult to divine any strategic vision”, said MPs on the Commons defence committee, several times.

His foreign policy has been a kind of armed voyeurism, more worried about Russian money than incursions into Sebastopol

Cameron bequeaths a country that is fractious and anxious. He has proved to be the great separatist. Once his party were unionists, now Wales never escapes prime ministerial mention without a sneer; under him Scotland came close to dissolving the United Kingdom. Us and them has been his governing style. His macroeconomic policy failed; national debt has kept rising; productivity and investment levels are as dismal as the trade balance. Unpicking the values of the welfare state has meant undermining the idea that people should care for others beyond their own. The big society is hardly spoken of these days.

As recovery takes hold, the indices of inequality resume their upward flight: the top 1% has flourished in the great recession. Social mobility depends on opening up the closed spaces of elite Britain but they remain, as they were, stuffed with ex-public schoolboys. Social policy has ossified, no longer attuned to families with young children. The government has shrunk or shut Sure Start children’s centres, abandoning a great evidence-based experiment in improving the life chances of disadvantaged families.

Before Margaret Thatcher’s era, the Tories had a penchant for muddling through, avoiding confrontations and sharp edges; they were conservators, not wreckers. Cameron has gone much further than Thatcher dared. The survival of the United Kingdom itself is in doubt and it’s an open question who “the British” now are. An election result leaving the Tories at the helm would see more destruction, financial, social and moral. What they offer as a vision of who we are, what we value and where we belong in the world is small and mean.

Polly Toynbee and David Walker’s new book, Cameron’s Coup is published by Guardian Faber on 29 January. To order for £7.99 (RRP £9.99), visit bookshop.theguardian.com or call the Guardian Bookshop on 0330 333 6846